Michael Mauboussin of Legg Mason on the merits of doing less, and on why investing is getting harder.
I’m at Aspen Ideas later this week, and some of the sessions there are livestreaming here.
Good stuff from my tireless and prolific friend Mark Suster on the changing nature of venture capital:
The venture capital industry has changed over the past 5 years in ways that I believe will be lasting rather than temporal change. We are in the process of our own creative destruction with new market entrants and new models of innovation at the precise moment that our industry itself is contracting.
When the dust settles, although we will have fewer firms, each type well end up more focused on traditional stage segments that cater to the core competencies of that firm. The trend of funding anything from the first $25,000 to funding $50 million at a $1 billion-plus valuation is unlikely to last as the skills and style to be effective at all stages are diverse enough to warrant focus.
I will argue that LPs who invest in VC funds will also need to adjust a bit as well.
Some recent venture data from CalPERS here.
Remarkable data in U.S. Census projected country populations through 2050. Check the rise of Nigeria, versus the collapse of Russia and disappearance from the list.
Despite record growth and prosperity, Germany’s feeling unprecedented angst. And it’s not just Greece. It’s a feeling that things are awry, from technology, to immigration, to, yes, the European Union itself. There is even a word for people feeling that way, they’re called Wutburger.
Yet it is very hard to find anyone here who is happy about this state of affairs. Unlike the great Rhineland industrial booms of the 1950s and 1970s, this one is provoking Germans to turn against their government, against Europe, against technology and growth, against outsiders. It is an inward-looking, self-questioning moment in a country that the rest of Europe very badly needs to be involved in affairs outside its borders.
If previous German booms were marked with a national mood of confidence and optimism, this is a prosperity of angst and fear: According to one survey, 80 per cent of Germans now believe that the future will be worse than the present, that “everything is getting worse.” There is an entire consulting industry devoted to analyzing the “national angst.”
A keeper quote from a Canadian official in a good AP roundup on the epic struggle over where Canada’s oil goes in 21st century — China vs the U.S.:
We’re not the 51st state. It’s not the business of the United States to decide where Canada sells its resources.
I get asked this all the time, so here is a quick dump of a few of the books I’ve been reading on my Kindle. Perhaps some summer reading in here for someone.
- Fire Season: Field Notes From a Wilderness Lookout
- Bloodlands: Europe Between Hitler and Stalin
- The Psychopath Test: A Journey Through the Madness Industry
- The Big Rock Candy Mountain
- Dune: 40th Anniversary
- Anatomy and Physiology For Dummies (For Dummies (Math & Science))
- Twilight of the Mammoths
- Otherwise Known as the Human Condition
- The Big Thirst: The Secret Life and Turbulent Future of Water
Eye-opening, if unsurprising stats on the consequences of ever-heavier vehicles on the roads:
Pounds that Kill: The External Costs of Vehicle Weight
Michael Anderson, Maximilian Auffhammer
Heavier vehicles are safer for their own occupants but more hazardous for the occupants of other vehicles. In this paper we estimate the increased probability of fatalities from being hit by a heavier vehicle in a collision. We show that, controlling for own-vehicle weight, being hit by a vehicle that is 1,000 pounds heavier results in a 47% increase in the baseline fatality probability. Estimation results further suggest that the fatality risk is even higher if the striking vehicle is a light truck (SUV, pickup truck, or minivan). We calculate that the value of the external risk generated by the gain in fleet weight since 1989 is approximately 27 cents per gallon of gasoline. We further calculate that the total fatality externality is roughly equivalent to a gas tax of $1.08 per gallon. We consider two policy options for internalizing this external cost: a gas tax and an optimal weight varying mileage tax. Comparing these options, we find that the cost is similar for most vehicles.
- The joys of ex ante thinking about bubbles, ex post. http://feedly.com/k/kmV9A0 ->
- Film editors pissed that new Final Cut Pro X contains slumming commands like "Send to Facebook” http://feedly.com/k/loLFK2 ->
- The age of financial busts, by Paul Krugman and Robin Wells http://t.co/AvgzgOd ->
- Anagrams for "the tipping point". Current favorite: Netting hippo pit. http://bit.ly/klG5E9 ->
- Leonhardt: The case against college education is no better than the case against high school a century ago. http://nyti.ms/ky2ny7 ->
- Soros: Europe needs an ejector seat. http://bloom.bg/kzQKeX ->
- [greader] Germany’s season of angst: why a prosperous nation is turning on itself http://dlvr.it/Xtnlm ->
- Greek crisis puts future of CDS in doubt, or Tom Stoppard Comes to Credit Land http://t.co/OqVu6DW ->
Five guys, all of different ages, enter a bar and take a seat at a round table. What is the probability that they are seated in ascending order of age?
Source: Susquehanna International Group